August 02, 2018
Economic Outlook – leading indicators at a glance
Germany - Leading indicators down
Leading indicators for the German economy are down across the board. The Ifo Business Climate Index dropped in terms of current assessment of the business situation. However, expectations remained unchanged. The sentix Economic Index fell both in terms of current assessment of the business situation and expectations, with expectations sliding into negative territory. The German Manufacturing Purchasing Managers’ Index dipped as well but managed to remain well above the growth threshold at 55.9 points. In contrast, the already low ZEW Index experienced another slight drop. Last but not least, the Economic Sentiment Indicator experienced another slip following a brief stable trend. Toll road statistics indicate a minor increase in truck mileage.
The Eurozone – Leading indicators down slightly
Leading indicators for the eurozone retreated recently as well but remained on a high level. The sentix Economic Index fell noticeably, mainly due to lower expectations. Current assessment was also less positively evaluated as was previously the case. The Economic Sentiment Indicator experienced a slight drop for both the Eurozone and the EU as a whole. The German Manufacturing Purchasing Managers’ Index was also down slightly and is currently at 58.6 points. The ZEW Indicator of Economic Sentiment fell slightly as well. However, the index has been seeing sideways movement for several months. The latest values from the quarterly Ifo Business Climate indicators for the eurozone were derived from the February publication. The Business Climate Index balance rose by 6.2 points to 43.2. Current assessment of the business situation was up from 42.9 to 51.3 percentage points and expectations from 31.3 to 35.4 points.
World economy – Leading global indicators see upward trend
Most leading indicators for the global economy are pointing upwards. OECD leading indicators improved slightly, while the Bundesbank’s leading indicator for the global economy experienced a much steeper increase. The shipping container activity Index was up as well, while the Baltic Dry Index has been seeing sideways movement. The German Manufacturing Purchasing Managers’ Index remained unchanged at 56.0 points, well above the growth threshold. The Ifo World Economic Climate continued its upward trend, increasing 8.9 points over the previous quarter to a current 26.0 points. The trend can be attributed to improved assessment of the business situation by 11.1 percentage points to a current 28.3 and a boost in expectations by 7.0 to 23.9 points.